Hims & Hers Health, Inc. (HIMS) stock intrinsic value fair value estimate & owner earnings analysis

Hims & Hers sells prescription and non-prescription health products directly to consumers through its websites and apps, mostly on recurring subscriptions: hair loss, sexual health, dermatology and, through the Hers brand, women's health and weight loss. Revenue grew from $272M in 2021 to $2,348M in 2025, and in 2025 about $2,214M came from the United States and $134M from the United Kingdom, European Union and Canada, the latter largely through acquisitions (Zava and Medici). Personalized treatment plans, which can include compounded formulations, were over 70% of U.S. revenue in 2025, up from about half in 2024. A majority of 2025 U.S. revenue came from products other than GLP-1 weight-loss drugs. How we measure earnings. We start from cash generated by operations, remove the swings from working capital, subtract stock-based compensation as a real cost, and subtract the part of capital spending that keeps the business running (spending in proportion to revenue growth is treated as growth spending). On that basis earnings per share were about $(0.57) in 2021, $(0.33) in 2022, $(0.13) in 2023, $0.20 in 2024 and $(0.06) in 2025. Stock compensation is large ($135M in 2025) and is the main reason cash flow of $300M turns into so little. The 2025 figure is depressed by $242.6M of capital spending, which included the C S Bio asset acquisition and expanded in-house fulfillment; only $35M of that is classed as growth spending by our method, so 2025 likely understates a normal year. We therefore use 2024 ($0.20 per share) as the level for the current business. Earlier years are excluded because the company was loss-making and much smaller. The most recent full year fell versus 2024 (from $0.20 to $(0.06)), so we assume no year-one growth. Results for the first half of 2026 do not corroborate an improvement: revenue was $1,361M (about 20% higher than the prior-year half) but the company reported a net loss of $178M versus a profit of $92M a year earlier. The cause of that swing could not be established from the filings available to us, so we have not raised or lowered the earnings level because of it. Base case: about $1.90 per share. Owner earnings stay at $0.20 per share for ten years, then fade to zero over the following ten. We credit no growth: revenue growth has been strong, but it has come from launches, acquisitions and marketing rather than from a mechanism that has run steadily through a downturn, and the company has reported a full-year profit only since 2024. We credit persistence because subscription revenue recurs and the brand has produced growing revenue every year since 2020. Bull case: about $5.20 per share. Capital spending returns to the ratio to revenue of 2024 (about 3.6%) rather than the 2025 level, which puts 2025 earnings near $0.55 per share (cash flow after working capital of $327M, less stock compensation of $135M and capital spending of about $49M). That level is held for ten years and fades over the following ten. It rests on 2025 reported figures, not on new products. Bear case: about $0.00 per share. On the 2025 results, and the first half of 2026, earnings after stock compensation and capital spending are around zero, and the company also carries $1.0B of 0% convertible notes due May 2030. A further, specific risk is Novo Nordisk's February 2026 patent lawsuit (Delaware federal court), which seeks damages including enhanced damages for alleged willful infringement and a permanent injunction against the company's compounded semaglutide products until the patent expires on December 5, 2031. The company has said it cannot estimate the possible loss. We assume compounded semaglutide is stopped and nothing else replaces its earnings, so nothing is credited as worth a positive amount. We do not subtract net debt from the valuation because owner earnings are already after interest. Things we tested. The main assumption behind the base case is that 2024's level is representative. Two facts push against it: 2025 came in lower on our measure, and the first half of 2026 was a loss. Two facts support it: cash from operations was $300M in 2025 (up from $251M) and most 2025 U.S. revenue was not from GLP-1s. We left growth out because the Eucalyptus acquisition (announced February 2026 for up to $1.15B including deferred and earn-out payments, and still subject to closing conditions when the annual report was filed) and the international expansion are not yet proven. What would make this wrong: a court declining Novo's requested injunction and the company sustaining margins with much lower stock compensation and capital spending would lift value toward the bull case; loss of compounded offerings without replacement would move toward the bear case. Margin-of-safety price: $0.60 per share. Regulatory and litigation exposure, heavy stock compensation, and a lower-than-2024 recent year call for a large margin of safety, so the price is set relative to the bear/base range rather than the base value alone.